Delivering the Data-Driven Business

February 5th, 2013

February 2, 2013-

By Malcolm Wheatley

Data – from within the business, and outside it – has never been more richly available. But how best to exploit it? Malcolm Wheatley finds out.

To increase its sales effectiveness in a competitive market, Kimberly-Clark Professional engaged price optimisation and margin improvement specialist PROS to provide pricing guidance to its sales organisation.

“Getting data from the factory floor – and elsewhere in the enterprise – has never been easier: the trick is to be able to analyse and leverage that data, in order to deliver real business value. You have to start with a goal in mind, and an improvement that you want to make” –Mark Carleton, Service Director, Mestec

Pulling in data from a wide variety of sources, the plan is that PROS’ analytics software will provide deeper market and customer insight to support the company’s pricing and selling decisions.

“Using big data applications, like PROS, is about taking millions of transactions from multiple data feeds, in order to get the greatest insight into customer behaviour and willingness to pay,” says Rob Glenn, PROS’ European general manager. “Many companies still make a lot of price and sales decisions using data managed on multiple spreadsheets, rather than analysing real-time data and transactional history.”

And at Cheerios manufacturer General Mills, employees in over a hundred countries worldwide are helped to share common goals and a common General Mills culture via a Twitter- and Facebook-like social computing platform that helps employees collaborate, streamline innovation, and bridge the communication gaps across geographic and functional silos.

The common link between all three? Much of the raw data that is involved is quite apart from, and conceptually quite different from, the data that a company typically holds in its ERP system.

In short, as the tentacles of a manufacturer’s enterprise systems reach outwards from the cosy environment of the office, where ERP holds sway, and moves to embrace mobile devices, equipment on the factory floor, social networks, and – say – sales data held on customers’ point-of-sale systems, the ERP-centric view of the world becomes less relevant.

What’s happening, says Mike Evans, director of research at analysts Cambashi, is that a sea change is underway in both the art of the possible, and the amount and type of data that enterprises must deal with. And it’s data that finds no ready home within the typical ERP system.

How so? Because it is not the transaction-centric data that is the lifeblood of ERP systems. Instead it is event-centric, people-centric, device-centric or location centric – to name but a few of the possibilities.

“There’s a 15-year secular shift underway. You can now give an IP address to a whole range of devices that you couldn’t do before. Either because it wasn’t possible, or because it simply didn’t make sense” – Mike Evans, Director of research, Cambashi

Changing times

“There’s a 15-year secular shift underway,” says Evans. “You can now give an IP address to a whole range of devices that you couldn’t do before. Either because it wasn’t possible, or because it simply didn’t make sense.”

Take, for instance, the factory floor, where new and low-cost networking technologies – think IEEE 802.11 and Zigbee wireless mesh networks – are re-writing the economics of factory-floor integration. Or the increasing role played by Bluetooth, and other so-called ‘machine-to-machine’ (M2M) technologies.

And away from the four walls of the enterprise, think about the data captured by mobile devices such as tablets or ruggedised laptops, or the GPSequipped and sensor-equipped RFID tags that increasingly accompany shipments.

Or consider the routes taken by delivery vehicles, as well as pallets of goods, which can be captured and analysed with the sort of location and dwell time analytics solutions pioneered by technology providers such as Esri and Geoloqi.

“The ERP view of the world is being replaced by one of industry networks,” says Evans. “It’s about collecting data from a wide variety of data sources – in the factory, or out in the field, or from social networks and supply chains. And there are a whole host of small, niche companies springing up to help businesses make use of it.”

One such is Forcam, albeit with SAP co-founder Dietmar Hopp as a 17% shareholder.

But it is through analysing that event-driven data that improvements in productivity metrics such as OEE are delivered, he points out.

Already in use by manufacturers such as Daimler, Audi, BMW, and Borg Warner, Forcam’s Factory Framework software has been credited by Audi with delivering a 20% increase in productivity in the company’s capital-intensive press plants.

“Manufacturers can gather more and more data from more and more places. But the question remains as to how that data is to be used. You need to be able to say: we have created extra capacity in order to produce more orders, or we have raised revenues or increased margins, or brought higher-quality products to market faster” – Jonathan Orme, Sales Operations and Marketing Manager, Exel Computer Systems

Microsoft Gold partner NewsGator, another niche firm, builds systems to help manufacturers such as General Mills, Merck and Kraft Foods to harness data from social networks and other non-ERP data environments. The goal: to help people share business-critical data more easily, in order to deliver better decisions.

“Manufacturers can form dedicated ‘communities’ around specific projects and products, capturing people’s interaction at a very detailed level – at every stage from ideation to manufacturing engineering collaboration,” says NewsGator chief executive Daniel Kraft.

“In contrast to the limited circulation of e-mails, social computing provides a virtual ‘room’ in which all the relevant people sit – even if widely separated by geography or function.”

Value for money

But the fact that data from widely divergent sources is now more readily available than ever does not of itself deliver an ROI, warns Jonathan Orme, sales operations and marketing manager at specialist ERP provider Exel Computer Systems.

“Yes, manufacturers can gather more and more data from more and more places. But the question remains as to how that data is to be used,” he points out. “It needs to be able to be used in a joined-up way, targeted on real-world benefits. You need to be able to say: we have created extra capacity in order to produce more orders, or we have raised revenues or increased margins, or brought higher-quality products to market faster.”

“Getting data from the factory floor – and elsewhere in the enterprise – has never been easier: the trick is to be able to analyse and leverage that data, in order to deliver real business value,” he stresses. “We’ve clients who have generated significant value, but you have to start with a goal in mind, and an improvement that you want to make.”

Back at analyst firm Cambashi, director of research Mike Evans concurs. It’s a brave new world, he agrees, but that doesn’t mean that manufacturers should rush out and invest in brave new systems and pieces of IT infrastructure.

“It’s really all about doing the classic MBA-style analysis, and figuring out what it means for the business. Do that first, and before spending any money at all,” he advises. “And whatever the outcome, remember that it’s a business initiative, with a looked-for return, that you’re investing in – not a piece of software.”